A new antitrust movement is on the march.

June 17, 2009

Obama today announced his proposal for restructuring the financial sector, and although there are some excellent parts of the proposal, with real teeth on them (new standards on leverage, for example), the overall gist of the package is oversight. His accompanying explanation also focused on oversight:

Mr. Obama told reporters on Tuesday that a "lack of oversight" allowed what he called "wild risk-taking." He said it led to "very dangerous" conditions that imperiled the global economy.

He believes there need to be more guards on watch, in effect. More (and more independent) weathermen and women, more border guards. In this view, the crisis happened--bottom line--because not enough good people were watching out for risk.

Sam Brownback, Republican Congressman Burgess, Democratic Congressman Cummings, Democratic Congresswoman Maloney--unlikely bedfellows, to say the least--all appeared to accept the arguments of Joseph Stiglitz, Simon Johnson, and Thomas Hoenig, that the current PPIP and TARP projects are not just foolish but dangerous, and that we need a radical restructuring of the response to the crisis.

The panel starts with discussions of economic failure, but ends with the problems of political failure. As Congressman Burgess said in the opening remarks, "Trillions of taxpayer dollars are at risk, but congressional approval is not needed for the plan to proceed …on its face this is a violation of the democratic process."